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Theme: Insider Trading JPEGs 

  • Nathan Chastain, formerly of OpenSea, charged with “insider trading” in the form of digital fraud
  • What does this mean for crypto exchange employees, influencers, NFT project creators, private discord members, etc
  • Blockchain & social traces gives public & “definitive” proof not available in other industries


[00:00:00] Today on all about affordable NFTs, we are talking about some insider trading JPEGs. We're getting pretty serious here with this, uh, open sea accusation. We'll get to that in a little bit, Andrew, how's it going? What are you seeing? Uh, well, see in this, this news about insider trading here, but, you know, just to be clear, this is, this is available to everyone, everything that we talk about here on this podcast.

[00:00:24] So this is publicly available information. As of now, anything that we are saying, these words you hear right now, we have disclosed. Also sometimes we do. I will. So we're making a joke about like, you know, when information is publicly brought or not brought. Yeah. We'll get into a bit, so yeah, what we're talking about here is Nathan chesting formerly of open, see Nate dot E uh, he has been charged with a form of insider trading.

[00:00:53] It's basically some digital fraud, uh, by the FTC or the, by via the FTC. And so he has by actually facing. From, uh, the district attorney, right. Of New York district in New York, they don't mess around. Yeah. So yeah, they, they have church and with two different accounts here of insider trading, because he was, uh, buying up, uh, some collections before featuring them on the front page of open seat, then selling them afterwards.

[00:01:24] Th this is all through not his main Nate dot Edith account which, you know, certainly doesn't. Him here. You know, what's, what's I don't know. What's kind of funny about this is that it's, we're really talking about, I think about 10 Eve that he profited and, you know, compared to many of the other scams that we see in this space, this is a relatively small amount and I'm sure, uh, you know, certainly not worth whatever.

[00:01:48] It certainly wasn't worth risking his job for this. So, you know, obviously a huge mistake here and now, uh, facing much bigger, much bigger potential, uh yeah, losing the word here. Uh, yeah, I've seen criminal, uh, sort of criminal consequences and you have to 40 years because of the per count issue on each of the.

[00:02:10] The notes that they've found in this case. So, I mean, 40 years for front running JPEGs is, is real, but let's take a step back though. You know, what may be happening is a larger precedent. Obviously like the Southern district of New York. Do we want to get a lot of work? But right. Great. Now we're maybe we'll get into this more when we want to get into this.

[00:02:29] This is worth talking about a whole lot more, but that is the news. That's the big news. That's a, you know, kind of all over NFT world right now. And hard to ignore that. So we will get into that a bit more. Well, a couple other things going on here, uh, we've got pooled together. A, so this is a, let's see a, sort of a.

[00:02:47] they like to call it a loss. That's the problem. I guess I shouldn't say that it's a lottery. That is the problem is being called a lottery. And really it's a savings account. You put some in there, you don't lose your eith or whatever you, you put in there, your state get, essentially you say I'm not going to remove it.

[00:03:03] Then they earn interest with the. That is in there. Somebody gets all of it by, you know, they pick a winner. Anyway, there is, uh, a lawsuit out against the, the, uh, protocol here. So the founder is, uh, trying to raise money to, to vend himself and, uh, against these charges. I believe the person that has said has brought the charges, traded about $10 worth or some that are deposited about $10 where something very minimal.

[00:03:29] And so it's pretty clear that they were looking to. Yeah, looking to make a lawsuit out of this. So whether it ends up being frivolous or not, as the founder has called it you know, he needs to defend himself. So he is trying to raise funds via this, uh, pull together and FTE sale. It looks like, I think it's up to about 1,000,900 thousand or so right now.

[00:03:52] So that is out there. We've got a link. I have not I haven't actually purchased one, although I feel maybe, you know, maybe I should support, uh, someone trying to do something. Excited or at least what I think is on the right side of crypto right here. So interesting use case here, you know, we've seen this in a few other places and you know, I like that, that, uh, there is an option to, to raise funds where you and NFT.

[00:04:13] Yeah. It's power of entity with a purpose and we've seen it, uh, uh, times before, but rallying against the sort of injustice. Right. And so that all that will drive it. I mean, it's clearly not for a revenue break here. It's more for a statement piece. And you know, if it goes down as a, is a historical wind potentially.

[00:04:30] That, you know, that could be an interesting point of point of pride if you're, if you're picking it up, but yeah, you got some dollars go, you know, let's say that pool together goes on, uh, to, to be successful here. I think there's a decent shot that there could be a, something for the supporters down the line.

[00:04:47] Yeah. It looks like they've got a 769 east goal because of course, 69. And, uh, there, there are about 530 these on they're on their way there. And they've got the mid So we'll toss that in. I mean, he can find that.

[00:05:03] All right, moving on to the next one here. We've got okay. Yeah, we've got the links down. This is a Dow, that's one of promises to buy a golf course eventually, but they have actually forged a relationship of some sort with Callaway. They are supporting them and I'm not exactly sure of the details, but I saw that they, uh, you know, had kind of hinted at some big news coming out.

[00:05:23] And I would say that is relatively big news. Calloway's is a big known golf brand and they are, uh, And dinner a partnership of some sort with a Dow. So hopefully this keeps going and they can, you know, this can be one of these success stories of a Dow. You know, we've seen a lot that have not been able to achieve, uh, their stated goals quite quickly.

[00:05:44] Uh, so, you know, it's nice to see that this is still going and developing into something. You're going to see you. I think, uh Dows and NFT. Extend into membership and SAS relationships quite a bit, right. Anywhere web two has previously been like, Hey, you know, buy a credit card thing and you're in a database.

[00:06:02] Like there's just an inherent power to moving that. It's also a collective ownership. And I think we're going to see that more in sports, and you're gonna see that, uh, for sports teams. And it's interesting to see that for, you know, classically a golf course, which traditionally is supported by member fees and.

[00:06:17] Question is after the initial one, what happens on year two, right? That's the ongoing, or maybe you get the option to mince your year two and who knows, but that's yeah, we'll see. I mean, you know, I think that's a, it's an interesting analogy to say that it's essentially a member owned, uh, club and a member of members own all of the pieces of a collection and, you know, kind of up to the members to figure out how to, how to fund that and move, keep moving forward each year.

[00:06:45] I would just love this, like, sort of like that, like dowel voting on whether or not to make like the steepness on like whole 12 higher or lower. And I do agree it's too fast. It's to put it to a vote.

[00:06:57] All right. And lastly, this is a scan that I've seen pop up recently. Uh, I definitely noticed this in my own wallet. Some pieces showing up in my wallet with offers on them of an offers of like 0.7, eight or something. And the, the scan is here that they won't the offers won't actually be valid. They tried to eventually get you to go to another to their site which will immediately pop up where it strikes, uh, a, uh, met a mass sign and trying to get you to sign a transaction immediately.

[00:07:27] You know, and that's obviously dangerous, never want to never want to sign anything that you aren't very clear of what it is doing. But that is a new one. So just be on the lookout for that. If you do see something show up in your wallet, that's not that unusual. It's more unusual to actually see a relatively, a decent size offer on those.

[00:07:45] Do not try to accept those, you know, we can hide that in your open seat wallet. Uh, just be careful always once you click also, interestingly, buried in this story is that open, see recently made its code a fully public available to the public positive, negative implications, as they say, but hoping that others will help able to provide code improvements.

[00:08:06] So we'll see.

[00:08:08] All right. Well, that is it for headlines. We'll, we'll move on to our affordable project, which I have one for us this week. Are you going on fire? Actually, you're OSA. NACI I'm gonna pronounce that. Right? B O so Nachi just been creeping on up, creeping on up. I hope folks in discord grabbed on that. It's not a bad pick before, so yeah, that has done, that has done love and happy.

[00:08:31] You know, I don't want to pat myself on the back too much because you know what happens in this space. Oh,

[00:08:36] all right. So with that being said, I do, I have an art blocks, uh, collection here called ancient courses of fictional rivers. The artist is Robert Hodgkin, a artist out of, I believe he's in Brooklyn has been doing generative art for some time. I'm really impressed with some of the physical prints that he's done.

[00:08:54] Although I don't have one, they're almost sold out. He has a monster. Definitely recommend checking those out. What this collection is, is a thousand pieces of generative art, you know, eat. So we've talked about this a bit in the past. It's meanings that the code is run. There's a thousand different variations that come out.

[00:09:09] The idea here is it's. These are rivers. Over time, they're not real rivers, but you can see different how they move over time. And then the civilizations that sort of pop up around them. When I first was looking at this full disclosure, I do have a few of these. They were under 0.2 Eve 0.2 was the was the lowest mid price.

[00:09:29] They did a, uh, they do a Dutch auction with curated pieces. So it pointed to was the lowest price that they got to, they did get down to there. After starting, I believe at three Eve sort of hit at a. Know, not a great time where there wasn't much wasn't much going on at all in the NFTE space was pretty quiet and I feel like they had snuck through a bit.

[00:09:51] So I was able to pick some up under 0.2. There's a couple still under, uh, under 0.2, five. I think the floors are on 0.2 right now. I really liked the look of these and, uh, you know, I should say that, uh, my wife, my wife also helped me, uh, come to this collection. She hasn't seems to have an eye for, for some of these.

[00:10:10] And definitely helped, uh, helped me pick some of these out. I think that the collection looks nice. I don't know how fast people may. To this collection, but it does, it seems like a relatively low price. Especially if you can look around, it's not moving real fast. And I was able to even get one offer accepted at 0.15.

[00:10:31] So there are a handful under that at 0.2, five and under, and I think it's. Worth checking out for keeping an eye on, if you, uh, if you're looking for an art blocks piece, there's curated collections, they've scaled way back and how far and how often they're offering them in a number of pieces in these.

[00:10:50] And I definitely noticed that our blocks in general has been minting out many more projects recently with some of the changes they've made to, uh, the collection sizes. And I think. That's something that I like in, in, in this is that you've got a lot of collectors people that are looking for maybe to put a few of these pieces together and not just hold one.

[00:11:09] So I think that the. If you can get in at art at it. Good art books. I mean, on a good art blocks project at a relatively low price, they will hold some value. Well, over time. So I like this one, there are blocks had this big boom, right. And to get into our blocks because there's many people joining us for the first time, our blocks would just popping off last summer.

[00:11:31] So an option like this, right. To have gotten into it, it would have been one again. And the floor would have been like for you just because it came from, and this is important, the curated side. Cause there's a lot of. Like there's like the art box other projects, and there's like a curated area. So the hit factory playground curated is, you know, that's, that's the primary stuff.

[00:11:51] It's the stuff that I focus on the much, the most. And yet there was a time where this would have been at certainly over one the piece, but I think they would have been up to over three just because it was in our blocks project. Our blocks is definitely cooled down. You'll still see some, you'll still see a lot of floors.

[00:12:08] That's. That are people selling off at a pretty steep discount to what they may have paid, but I think it's also come around a bit where people have overlooked. Some of the, the quality collections because of that sort of disappointment of price that a lot of people are experiencing. You know, it's hard to go talk about it when you're, when you're selling a piece for a, uh, for a pig, a loss, even if you're selling it for two and a half feet, you know, that's, now it looks like a good sale, but not so much if you, uh, if you hyped in at 80 or something, Yeah.

[00:12:42] And just to coming back to, uh, this particular artist, I will say, just, just to note on the art, I have never seen anything like this. It is just mesmerizing. It's an active piece that actually develops, and there's like, you can press different buttons to reset it. And it is a very beautiful dynamic. The, the artists has got a lot of work behind it and actually looks like about 25% of this goes to a social impact causes, including not limited to the environment and Ukraine.

[00:13:11] So a nice narrative there, but, uh, that this guy has got a bulk of work that he has put out there. And this is, this is good looking stuff. You know, I was looking at art blocks too, and I noticed that the, the squid. Which were the first, I believe original drop by snow fro in blocks arena. You know, they peaked it like they were going for like what 28th or something absurd at one point.

[00:13:35] And now down to like six Eve, which is very interesting as well that, like, I think there's a very sort of, it's not going anywhere, at least from where we stand in terms of Capitola art and its role in NFTs. But the whole ecosystem there is significant. Yeah, overall. I mean, you know, like I was saying, I think it's way down there.

[00:13:56] It is way down from where it was. They are, you know, I should, I also do some work with our blocks, you know, I know. So I should disclose that as well. But they have made some changes to how many, like I said, how many pieces they're offering in collections, how, uh, how often they're offering collections.

[00:14:13] So I think they have a max of two collections they'll do per week. And that means. Anything across their curated playground and factory projects. And so the last factory one was a called daisies that sold out relatively quickly, I think about five minutes, but it was, so it was a collection of just 200 pieces.

[00:14:32] You know, I think that that is a more appropriate size for a lot of these collections that may otherwise struggle to, to mint out. But then you see. It doesn't take that many collectors to, you know, to show some demand there. And I think that's appropriate 0.5 eith floor now after minting at 0.1. So, you know, in general, I think it's worth checking out our blocks a bit.

[00:14:52] If you want to get into degenerative art right now, there's some, the, the new mints are. Are going at a good speed, but not gas wars. So, you know, it's, you gotta be ready, but you know, ready to go, but it's not something where you have to, uh, to really pump up the gas a lot to, uh, to, in order to get your transactions.

[00:15:13] Right. So that that's been good. Great. As I'm saying, this for price is a 0.2, looks like a, about 541 owners for those thousand items. As you mentioned, danger, you, you do own. Uh, a number of these and it looks like it kind of came out early, April dropped, uh, no, March 29th and is, you know, kind of been steady, but hasn't, hasn't blown a woman, the doors off.

[00:15:38] And so this was one of those that was interesting, fine. So far, you know, I think I may, I may go with on this. I may go with similar to the us and Archie. I think there's a no good are good time. Good value. All right. Yeah. I'm going a little long there. So we will move on to our insider trading JPEGs in trader trading, cartoon animals, whatever you want to call these things, you know, we're, we're flipping JPEGs out, right?

[00:16:05] And now it's insider trading and woo. This is big deal. This is a big deal. It was a big time that we made it. Now. Our NFD is legit. Yes actually, because they're not, they know we're joking around, but I think in someone's mind, you're like, oh, you're just playing around as like, you know, I'm joking around in marketplace.

[00:16:21] It's an image like who cares? Like that's a commodity and the Southern district of New York is not messing around when it target someone. And as I was sort of like going on that, you know, narrative earlier 40 years, 40 years is on the table for doing this. I mean, this is, as you know, you're dealing with.

[00:16:38] You know, the, the world of securities and commodities and in the world of financial transactions, the government doesn't like it when you front run and doesn't like it, when you act on private information, unless of course you're in Congress and then you can do whatever you want and you can sell all your stocks and then put the entire country on you know, on pause, you can do that if you're in Congress, but if you're not in Congress, you can not.

[00:17:03] So I know that's a big segment of our audience, so, you know, I'm sorry, you can, you can just tune out for the next, wait a minute, come back. You're in Congress and you, uh, can you do insider trading and JPEGs? Yes. Oh, boy. I mean, I think it's interesting here, you know, I, I liked when, what opens he did when they got rid of him, this was certainly wrong for the company to have somebody doing that.

[00:17:29] And I thought that was appropriate. You know, I'm afraid of. This could mean for the NFT industry. We know that there's a lot of cases of people acting on information that is not public. You know, we've seen many cases of pre reveal collections where specific pieces are sold for well above the floor price.

[00:17:48] And then turn out to be rare pieces. What happens there, you know, we almost, we've certainly seen influencers and, you know, various levels of influencers from, you know, what we think of as Dick talk influencers to, you know, more, uh, maybe financially connected web web to, you know, type of people that seem to have a lot of information about collections before.

[00:18:13] The public does. And I think that we are entering a somewhat dangerous spirit here. If this is, if this is the precedent because there's a lot of people acting on non-public information. I think you could even say that there are private discords where, you know, inside that you have to be a collection holder you're then a owner of the collection.

[00:18:35] You're an owner of the company. Something of that collection of, is that what we're saying? Oh, I think that's and also what is a company, right? What is public information? Non-public information. Yeah. I don't want to be in this situation. I mean, it puts, it definitely makes me uncomfortable having certain conversations with, with people than thinking.

[00:18:53] And makes me think about this in a new light here. Oh, I hadn't thought about that way. I guess in my mind it was because open C is a much more established company. With, you know, uh, legal standing that it's seen by the government as like, okay, you, you you've promised to do this thing and provide this public good.

[00:19:13] And as part of your sort of service, you've, you know, allow people to buy, sell, hold, trade commodities, you've taken fees on those. Like that is your core business to do this. And there's a certain consumer trust involved with that. And that I imagine is what they're protecting, but taken to a logical.

[00:19:32] Extreme extreme. You are. I don't know where you draw that line. I also, I heard this on different narrative of saying like, you know, how different is this? Then a Nike employee that hears that the new air force ones are coming out with such and such, and they get a, an early drop and flip the shoes. They get in line early and they're able to, to get that like, okay.

[00:19:55] And to get there, I believe there was a, there was an executives, son, I believe who was arrested for, uh, flipping shoes on stock X. Uh, Oh, yeah, because he was, yes, because he was buying them early. So maybe, uh, you know, I don't have the link here, but you know, maybe the that's a good analogy and there you're right.

[00:20:16] I think there is a difference because that is the company actually doing the trading. And now I think we're, or I'm sorry, not doing the trading, but acting as the marketplace. The, you know, providing the place to do the trading and suddenly they know that they have influence over where people go on the site.

[00:20:35] And he certainly isn't really not helped either by, by using the hidden wallet. And I think that we are entering a new hazier where it's all on the blockchain, you know, between, you know, looking at. Archives of, of Twitter records of social media posts and looking at the blockchain, it's pretty easy to look at how the timing of things goes down.

[00:20:57] And there's not that level of, uh, I don't know, sort of intermediation between these where we can no longer directly see someone acting on something, doing something and, and, you know, Or, you know, in where exactly what time they did that, the blockchain certainly does that doesn't help them here. And you know, maybe he made the mistake of connecting it to his old wallet, but, you know, I think I like to see that there's something happening, but I also think that there's much bigger issues in the NFP space, and I'm not sure that this is going to make anybody feel safer that doesn't already, if it isn't already willing to get into NFTs.

[00:21:39] I'll take the contrary to that. So what I like to see is the government and regulation taking the NFT marketplace. Seriously, this is serious consideration of what should happen in this case. That is yes, complicated, but I would be more alarmed by simply leaving this to the wild. Being like go have at it, vigilante justice, the community rallied on Twitter and found you.

[00:22:06] So judge, jury, and then the execution was open C and they determined that this was the fair punishment for this look. Consumers were defrauded because this person acted in bad faith with insider information because they was buying early unfairly and dumping on the public market. I think, as a consumer and I'm going to be wandering into these platforms.

[00:22:29] I liked that these employees realize that they can't just kind of, because they can hide it in a wallet, which is just, let's just park how stupid that is for a moment, because everything is on the blockchain. Remember that, remember the technology that all this is built on is actually gonna make it far safer than these other industries.

[00:22:47] Uh, I, I liked that what will come up? This is some clarity actually knowing where the third rail is, is safer than guessing where it might be. And I think that might in the long-term in the short-term. You know, this, I'm not a fan of Nate by any stretch, but I think it's also unfair when somebody serves as a sacrificial goat for a cause.

[00:23:08] And I think there's a little bit of column AB here, a and B happening here. Yeah. There's definitely that. And you know, I definitely want, I do want more protections, you know, I guess I would prefer there to be. I, I prefer that they were going after some of the big scammers that we've seen, but I've taken a lot more out of, out of the space.

[00:23:28] Uh, you know, we've seen some big ones to the tune of 70 million. Was that for, although that was a I dunno, we've seen some big ones anyway, you know, I guess I do want something happening here. I'm just not sure, you know, this is it's, it's making an example here and that's, that's the point. They know him, they know exactly who it is, you know, there's plenty of, of records.

[00:23:50] There's no needing to go through and figure out who an anonymous person is or go try to deal with another country or you know, pretty easy in, in, in that sense. So, you know, the unfortunate. But it will, uh, you know, one thing I wonder does, do you think that open sea is at all at fault here? Do I believe that open C is at fault here?

[00:24:11] I would have to have more information about their employee guidelines and legal, uh, legal setup here, you know, for instance, uh, I know, you know, when you go to work for, let's say a hedge fund, you're dealing in equities. Yes. You can only hold a certain generalized bucket. You can no longer deal in individual equities, right?

[00:24:31] There are actually like restriction restrictions that can come into play for people that work in this space. And so did they create, here's the question? Did they create a culture of compromise, a culture of, you know, you do you and just show up to work. And in that case of handling, you know, this type of, uh, asset market.

[00:24:55] Maybe, I think it's worth looking at me personally. No, I didn't do anything wrong that guy's a trick.

[00:25:01] Wait until we uncover what else is going on on the blockchain. Uh, but again, I think a mold grows in the dark I'd like that sunshine is being shown here. Sure. A heck a lot better than it's frivolous silliness happening on attacking that, like, you know, the savings account for crypto and . You know, these are, these are all really, really important steps this some more so, because it's going to legitimize NFTs, uh, as this sort of asset class.

[00:25:30] Yeah. You know, who knows what happens at the end here? That's not going to be easy for him to fight, but I think you're right. That it will at least, you know, we'll know where the, uh, where the boundaries of.

[00:25:39] Yeah. Even if they're, they're widened scary, but again, in the short term, I think you're absolutely right. If you're asking yourself like, wait a minute, I think it's like be on the safe side, but also like clearly you're, if you're in a discord and you're a piece like that, and you're not getting things that are not, not public be careful if you're getting things that are like in a discord.

[00:25:59] I think you're fine. I'm just gonna be honest. Like if you're in, for example, like here's a, here's an exam. Right. Like we have a podcast, obviously the millions of followers that are listening to every episode and removing, removing project. Hey Congress, we just, by the way, you know, I think we can be, uh, we'll start disclosing that in a discourse, if you ever want to see what's coming up, but like, let me play this out.

[00:26:21] We know that we're going to talk about a project and that episode is not going to go live for another four or five. And frankly, we can buy into that project because we know that that's coming. Now, if we had obviously joking, maybe if some of you left a review and we'd have more followers to really, really move markets, but like jokes aside, if we bought that and then pump that and then dump that, that is an absolute unquestionable form of insider.

[00:26:51] Right. We are privy to information that this is going to get a promotion that only we know and hasn't disclosed. So again, maybe a good note to us. I'll continue to drop that in our discord, which is a public notice open discord for anyone to get there, by the way, none of this is financial advice because we're talking about Jay tags on the internet, which by the way, if you trade down on the insider, you could go to jail for a long time.

[00:27:11] Does that clear everything up? There's no real risks here. Right? So you're saying we're all in the clear, easy to buy JPEGs. Yeah. There's no worry about holding them in a wallet. Links are safe or ignore everything. We just said the last 20 seconds here in summary, join our discord. Leave us a report. Leave us a review.

[00:27:33] All right, Andrew. Good luck out there.